Railways nervous on licensing ‘theories’

Press, 28 October 1982, Page 7

Railways nervous on licensing ‘theories’

Parliamentary reporter

The Railways Corporation, which was established last year to replace the Railways Department, seems to be feeling insecure and threatened. The Government should think very hard before it made any major changes in the present transport licensing system, said the corporation’s Government-appointed chairman, Mr L. M. Papps. In recent public statements, the Minister of Transport and Railways, Mr Gair, seemed impressed with the recommendations contained in a discussion paper issued by the Ministry of Transport. Mr Papps said that the paper had recommended a change from quantitative to qualitative licensing for road transport services and had also examined alternatives to the present road-rail goods services restrictions. He published the detailed submissions made to the Ministry of Transport in reply to the Ministry’s paper. He criticised the Ministry’s paper for adopting “a largely

theoretical approach, basing its conclusions on the presumed effects of the changes proposed.” The authors of the paper were clearly unfamiliar with the working of the present system and with the criteria applied by Licensing Authorities and the courts, he said.

They seemed to have assumed that “licensing” meant “an absence of competition,” whereas the transport industry was highly competitive. There were almost 8000 general goods-service licence-holders and more than 400 new licences had been granted each year for more than five years. The paper had suggested that the removal of the roadrail restriction would result in a net benefit to the economy, but its figures had been largely theoretical, and had contained many errors and wrong assumptions.

Economic studies made of the actual position showed that, contrary to this claim, removal of the road-rail res-

triction would result in a loss to the national economy of some $2O million a year. Mr Papps said it was clearly in New Zealand’s best interests to keep the road-rail restriction.

He has released publicly the 84-page submissions made by the Railways Commission to the Ministry of Transport. In it, he said the present system of goods and passenger service licensing was not unduly restrictive. It had stimulated the growth of a highly competitive industry and safeguarded against needless expenditure in an industry which under-used its resources.

Mr Papps wanted the 1981 Transport Amendment Bill to be enacted to strengthen the hand of enforcement officers, and to help manufacturers by creating urban zones and the exemption of further commodities. The road-rail restriction would be retained as a flexible and effective protection, he said.